@Focker69 wrote:Is a HELOC factored into the utilization calculation of the score?
Essentially, I'm asking does taking out a HELOC and maxing it out have a serious impact to the score and is it treated the same as a credit card? Any exclusions to other versions of FICO?
I have never had a HELOC, but my recollection is that different FICO members have had different experiences with it. They sometimes report as revolvers, they sometimes report as though they were installment loans. Hopefully someone can jump in who has more knowledge about it. @Revelate would know.
I'm reasonably sure, though, that opening one, and maxing it out, would have a significant negative impact on one's scores.
"A HELOC is an open line of credit and subject to being used in the same manner as a credit card. The credit report will show the HELOC balance, credit line and payment history.”
https://www.bankrate.com/home-equity/does-heloc-affect-credit-score/#affect-on-credit
@Thomas_Thumb wrote:My recollection is HELOCs above a certain $ threshold won't be included in revolving credit calculations. Your HELOC is certainly above the ~ $35k threshold for the older Fico versions. Not sure about Fico 8.
As a reminder the so called mortgage scores are all capped below 850. They top out at: EQ = 818, TU = 839 and EX = 844.
That makes sense. The utilization on my HELOC is not factored into my revolving credit utilization for scoring, though the Experian web site includes it in the revolving credit utilization that they display on my credit summary.
Taking a draw from it, or making a large payment, doesn't budge any scoring so far, but I have not gone over about 55% or below 45% utilization on it since I opened it and took the initial draw in February.
